A Libertarian Perspective on Family Leave

Paid family leave is getting a lot of attention lately. And while there is certainly nothing wrong with paid family leave, and employers can benefit from it just as much as employees, there is everything wrong with it when government—at the federal, state, or local level—provides it or mandates that employers have to provide it.

Since the passage of the Family and Medical Leave Act (FMLA) in 1993—which mandated that eligible workers could take 12 weeks of unpaid leave—Democrats in Congress and liberal and progressive groups have been calling for the unpaid leave in the FMLA to be changed to paid leave. It is continually pointed out that the United States is the only industrialized nation that does not guarantee any type of paid family leave at the national level.

As one would expect, all three Democratic candidates for president announced their support for some kind of mandatory paid family leave program.

King James, His Bible,... Laurence M. Vance Best Price: $11.33 Buy New $13.89 (as of 06:15 EDT - Details) Donald Trump and Hillary Clinton both brought up the issue of paid family leave during their first presidential debate. Under the Trump plan, mothers who take leave would receive benefits from the unemployment insurance system for a period of six weeks. This would amount to about 46 percent of a worker’s wages. It would be funded by reducing “waste and abuse” in the unemployment insurance system. Under the Clinton plan, new parents, caregivers, and others eligible to take leave, leave would be paid for a period of 12 weeks at a 66 percent wage replacement rate. It would be funded by “taxes on the wealthy.”

There has been a bill (S.786) introduced in Congress called the Family and Medical Insurance Leave Act. It would establish “the Office of Paid Family and Medical Leave within the Social Security Administration (SSA), to be headed by the Deputy SSA Commissioner.” This Act

  • Entitles every individual to a family and medical leave insurance (FMLI) benefit payment for each month beginning on the first day of the first month in which the individual meets the criteria.
  • Prescribes a formula for determination of an individual’s monthly FMLI benefit payment, as well as for the maximum and the minimum monthly benefit amounts.
  • Establishes the Federal Family and Medical Leave Insurance Trust Fund in the Treasury. Requires FMLI benefit payments to be made only from this Fund.
  • Amends the Internal Revenue Code to impose a tax on every individual and employer, all self-employment income, and every railroad employee, employee representative, or railroad employer to finance the Federal Family and Medical Leave Insurance Trust Fund in the Treasury for FMLI benefits.

The bill is currently languishing in a Senate committee.

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Four states (California, New Jersey, New York, & Rhode Island) have enacted paid family leave that is financed by employee contributions to a social insurance fund. Some cities and counties offer paid family leave as a benefit for municipal employees.

NPR’s “All Things Considered” has had some stories recently devoted to the subject of paid family leave:

It is this last story in particular that really caught my attention. Kelly McEvers, the NPR host, interviewed Aparna Mathur, currently a resident scholar in economic policy studies at the American Enterprise Institute (AEI) in Washington, D.C. AEI is a “conservative” think tank. War, Christianity, and... Laurence M. Vance Best Price: $10.07 Buy New $9.95 (as of 06:05 EDT - Details)

NPR could have interviewed an economist from a liberal think tank and gotten the same result. Not once did Mathur propose a market solution or criticize government or government-mandated paid family leave programs.

Mathur has also written on the subject of paid family leave for Forbes:

Again, more of the same. No market solutions. No criticism of government intervention in the workplace.

NPR should have interviewed a libertarian on the subject of paid family leave. But since I never received a call, I here offer a brief libertarian perspective on the subject.

  1. Paid family leave obviously benefits newborn babies.
  1. Paid family leave generally benefits mothers (and fathers if eligible) who take it. However, if the benefit pays less than 100 percent of the beneficiary’s regular salary, then the mother (or the father) may want to go back to work before required to do so. Also, the beneficiary may not want to miss work for more than a certain period in order to maintain a certain skill set.
  1. It is a blatantly unconstitutional for the federal government to have a paid family leave program, no matter how it is funded. Just like it is unconstitutional for the federal government to have Social Security, Medicare, and welfare programs.
  1. It is just as unconstitutional for the federal government to mandate that employers must offer paid or unpaid family leave. Just like it is unconstitutional for the federal government to set a minimum wage, require that employers offer their employees health insurance, and establish overtime regulations.
  1. It is an illegitimate function of government at any level to have anything to do with fringe benefits offered by employers. War, Empire, and the M... Laurence M. Vance Best Price: $16.00 Buy New $9.95 (as of 06:05 EDT - Details)
  1. There is no answer to the question of whether a company should offer paid family leave as a fringe benefit. Just like there is no answer to the question of whether a company should offer any number of other fringe benefits.
  1. Offering paid family leave may benefit certain employers. It might help them to acquire and retain quality employees. It might be cheaper to pay a skilled employee to take time off after the birth of a child than to hire and train someone to take his or her place.
  1. Once it is accepted that it is okay for the government to mandate that employers provide paid family leave, no reasonable and logical objection can be raised to the government mandating that employers provide any other fringe benefit.
  1. Paid family leave, vacation pay, holiday pay, sick leave, jury-duty pay, paid time off, and any other fringe benefit are matters to negotiate between employers and employees. The government shouldn’t even know what fringe benefits companies offer.
  1. Market solutions to problems are always to be preferred to government solutions.

These are the things that the economist from the American Enterprise Institute should have said.